No proposal of PSB merger under consideration: Govt

A panel was set up under the chairmanship of FM Arun Jaitley in November to examine the merger proposals submitted by banks.

PTI

January 02, 2018, 19:42 IST

Updated: January 02, 2018, 19:42 IST

Union minister Shiv Pratap Shukla today said no proposal regarding merger of Public Sector Banks (PSBs) is under consideration of the government.

However, the government has put in place an approval framework for proposals to amalgamate nationalised banks, the Minister of State for Finance said in a written reply to Rajya Sabha.

The Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980 provide that the central government, in consultation with RBI, the authority to make a scheme for amalgamation of any nationalised bank with any other nationalised bank or any other banking institution, he said.

To facilitate consolidation in the public sector banking space, the Cabinet in August gave in-principle approval for PSBs to amalgamate through an Alternative Mechanism (AM).

Subsequently in November, a panel under the chairmanship of Finance Minister Arun Jaitley was set up to examine proposals from banks for in-principle approval to formulate schemes of amalgamation.

A report on the proposals cleared by it will be sent to the Cabinet every three months.

Last year, five associates and Bharatiya Mahila Bank merged with State Bank of India (SBI), catapulting the country's largest lender to among the top 50 banks in the world.

With the merger, SBI joined the league of top 50 banks globally in terms of assets. The total customer base of the bank will reach 37 crore with a branch network of around 24,000 and nearly 59,000 ATMs across the country.

The merged entity began with deposit base of more than Rs 26 lakh crore and advances level of Rs 18.50 lakh crore.

A recent Allahabad high court judgment may, however, provide some relief with the court ruling that there shall be no tax levied in case of purchases made at duty free stores at the arrival or departure terminals.